How to Qualify for a Refinance
Qualifying for a mortgage refinance involves qualifying for a new mortgage loan, and if your income and credit scores have changed since getting the original mortgage, you may not get approved for a refi. A mortgage refinance features numerous advantages. It's the best way to convert an adjustable rate or interest-only home loan to a fixed rate, and a refinance also helps you acquire a better, lower mortgage rate.
Other People Are Reading
Instructions
-
-
1
Minimize debt to improve debt ratio. Qualifying for a refinance requires a debt-to-income ratio no higher than 38 percent. Pay off credit card balances and get rid of other debt payments to lower your total debt and improve your approval chances.
-
2
Retain recent income documentations. Holding an existing mortgage does not instantly qualify you for a refinance. Understand that lenders will review your finances and income again, and base approval on your present income.
-
-
3
Research different mortgage loan programs. Owing more than the value of your home or having very little equity makes it difficult to get a refinance. Talk with a loan officer to find the right refinance loan. There are programs to help people with a high loan-to-value ratio, such as the Making Home Affordable Program.
-
4
Fix your credit report and score. Don't expect to qualify for a refinance with bad credit. Pull your credit report and score to determine if you'll qualify for a refinance. The higher your credit score, the better. Pay bills on time and stop applying for unnecessary lines of credit to help increase your score.
-
1
